BLBG:Copper Extends Gain for Third Day on China Easing Speculation
Copper advanced for a third day on speculation cooling inflation in China, the world’s largest consumer, may provide room for the government to ease monetary policy to spur growth and demand.
The metal for delivery in three months climbed as much as 0.8 percent to $7,845 a metric ton on the London Metal Exchange and traded at $7,825 at 3:10 p.m. Shanghai time. The March- delivery contract on the Shanghai Futures Exchange closed 1 percent higher at 57,400 yuan ($9,087) a ton.
Consumer prices in China rose 4.1 percent in December from a year earlier, the National Bureau of Statistics said. That was the smallest gain in 15 months, and compares with the median estimate of 4 percent in a Bloomberg News survey and 4.2 percent in November. Producer prices gained 1.7 percent last month, matching economists’ forecasts.
“A lot of focus is on the fine-tuning of China’s monetary policy, and how it will affect demand and commodity investment inflows,” said Wang Na, an analyst at Guolian Futures Co. “For now, the actual demand seems to be weak.”
Inflation is set to moderate further in coming months and be less of a concern, paving the way for more policy easing as economic growth slows, Chang Jian, a Hong Kong-based economist at Barclays Capital Asia Ltd., said before today’s release. Chang expects four reductions in banks’ reserve requirement ratio this year to encourage lending and estimates inflation may slow to less than 3.5 percent by the second quarter.
Cash Discount
On Shanghai’s Changjiang spot market, copper for immediate delivery was traded at a discount of around 125 yuan to the front-month futures contract in Shanghai. Chinese imports of unwrought copper and products gained 13 percent from November to a record 508,942 tons last month, customs data showed.
China’s auto sales slowed last year, rising 2.5 percent to 18.5 million, according to data released by the China Association of Automobile Manufacturers today, which trailed growth in the U.S. for the first time in at least 14 years.
On the LME, aluminum gained 0.2 percent to $2,169.75 a ton, lead climbed 0.5 percent to $2,000 a ton and nickel rose 0.2 percent to $19,490 a ton. Zinc was little changed at $1,937 a ton and tin dropped 0.1 percent to $20,501 per ton.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
